The biggest advantage of television advertising, if used wisely, is the unbelievable impact on viewers. Constant repetition of a sales message helps make people feel that they know the product, whether or not they like it. The second issue is how product-market competition affects the equilibrium outcome.
On the other hand, fewer firms result in a higher price-cost margin. The former way of increasing the number of advertising firms reduces the price-cost margin and thereby the profit potential in the product markets.
A decision a TV channel must make within its schedule is the amount of advertising to allow. Note also that the total number of viewers increases following a reduction in the number of firms.
Since an increase in advertising tends to reduce the number of viewers, there are diminishing returns to television advertising. By considering the amount of advertising a channel allocates, a producer can speculate the audience size their commercials receive.
Another benefit of TV advertising is that it impacts a large number of persons not reach by print media. We are now in a position to investigate how the equilibrium outcome detailed in Section 2 is affected by a change in the number of advertisers, n.
Demonstration is important in TV because viewers are interested in what the product will do for them.
An advertising firm looks at viewer demographics and audience size when deciding which channel and commercial to use to realize the most benefits. Television advertising also involves several unique problems.
At an increase in the price of advertising, the firms in the market with many firms would, as expected, reduce their demand for advertising.
When a channel only sells a small amount of advertising, it can fill in with advertising for its own programs. And when commercials are bunched together, a viewer might use the time to get a snack or see what else is on.
In such a case, price-cost margins are unaffected by a change in the number of firms. The goal is to maximize profits by determining how much advertising to allocate and which programs to broadcast. Total spending on advertising increases as a result of a reduction in the number of firms, keeping constant the number of product markets.
Second, it invests more in programming to attract more viewers and thereby to encourage the producers to advertise more. There are several common types of television techniques and advertisements used by producers.
Finally, the producers compete in the product market by advertising and differentiating their products. Ralston began using some network television advertising halfway through the week study period. This dampens the incentive for each firm to increase advertising and would, all else equal, result in a reduction in total advertising.
Rather, networks or stations sell time for ads during a show. People tend to believe something more if they actually see it in print. A reduction in the number of firms makes each remaining firm more concerned about the fact that own advertising tends to reduce the number of viewers.
Some programs that are very flexible, such as newscasts and sports events, permit channels to air large quantities of advertising time.TERM PAPER OF SALES &PROMOTION MGT. Develop an online campaign covering all expects of creative execution of BSNL SUBMITTED TO: SUBMITTED BY:.
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